Research in the gaming industry showed that 8% of all slot machines in the United States...

Research in the gaming industry showed that 8% of all slot machines in the United States stop working each year. Short’s Game Arcade has 70 slot machines and only 5 failed last year. Use the five-step hypothesis-testing procedure at the 0.05 significance level to test whether this data contradicts the research report.

(a) State the null hypothesis and the alternate hypothesis. (Round your answers to 2 decimal places.)
H0: π =
H1: π ≠

(b) State the decision rule for 0.05 significance level. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)
H0 is rejected if z is not between _______ and _______

(c) Compute the value of the test statistic. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.)

(d) Determine the p-value. (Round your answer to 4 decimal places.)

Expert Solution

a) The Hypotheses are:

H0: π = 0.08
H1: π ≠ 0.08

b) Rejction region:

Reject Ho at 0.05 if |Z| > Z _0.025 =1.96

c) Test Statistic:

d) P-value computed using Z score calculated above and calculated using Z table shown below as

P-value:0.7949

Conclusion:

Since the |Z| < Z_0.025 and P-value is > 0.05 hence we fail to reject the null hypothesis and conclude that there is insufficient evidence to support the claim.

orchestra answered 1 year ago

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